Sweepstakes Scam Shut Down by FTC

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A sweepstakes scam that tricked consumers into paying a $20 fee to collect a fake multi-million-dollar prizes has been temporarily shut down by the Federal Trade Commission.

The case is part of the ongoing FTC crackdown against scams targeting financially-squeezed Americans, and the agency is suing to force the defendants to give up their ill-gotten gains. These types of scams are nothing new, and the FBI recently issued a warning against bogus lottery and sweepstakes notifications.According to the FTC's complaint, operators of the scam sent personalized mailers -- some with fake government agency names and official-looking seals -- to hundreds of thousands of consumers. The mailers included statements such as:

"Your identification as recipient for reported cash award entitlements totalling over $2,500,000.00 has been confirmed! We are so pleased at having the honor of informing you of this wonderful news."

Some of the mailers boasted prominently of their supposed affiliation with official government agencies, such as the "State of Illinois Commissioners of Regulation" and "OFFICE OF THE PRESIDENT OFFICIAL NOTIFICATION," along with language, symbols, and artwork such as "In God We Trust" and a bald eagle.

In order to collect the prize, the mailers stated, consumers were required to send a $20 "processing fee" by a certain deadline. Instead of receiving a prize, however, some consumers received information about entering sweepstakes.

The mailers also contained fine-print vaguely stating the operation was a reporting service that provided information on various sweepstakes, but failed to clearly disclose to consumers that they had not, in fact, won a prize.

Under a federal judge's order, the operation has been halted pending a hearing.

The FTC reminds consumers that legitimate sweepstakes don't require you to pay or buy something to enter or improve your chances of winning, or to pay "taxes" or "shipping and handling charges" to get your prize. If you have to pay to receive your "prize," it's not a prize at all.